Stock futures point to opening, financial-led gains

KateGibson

NEW YORK (MarketWatch) -- U.S. stock futures rose Tuesday, pointing to a second day of gains on Wall Street, as UBS AG disclosed new write-downs of about $19 billion, with the Swiss bank and Lehman Brothers Holdings Inc. offering for sale $18 billion in fresh equity.

"It's not just a U.S. problem, it's the European banks' turn to say yeah, we had a little exposure there too," said Art Hogan, who also points to an index showing confidence among manufacturers at a four-year low as putting U.S. economic woes in perspective.

"There's obviously a global impact to this credit problem, making the dollar show surprising strength and causing a sell-off in gold," Hogan said.

An added positive is the favorable reception to Lehman's offering; "it's three times over-subscribed; people are interested in investing in Lehman," said Hogan of the New York-based brokerage.

In pre-open trade, UBS
UBS, -1.93%
surged 6% as the Swiss bank revealed a $19 billion write-down, saying it would stuff its remaining illiquid U.S. real estate assets into a separate unit, and that it would need to issue another $15 billion in shares and that its chairman was exiting. See UBS story.

Lehman Brothers
LEH
added 10% after it announced plans to offer 3 million of convertible preferred shares "in response to investor interest." Lehman also expects to grant the offering's underwriter an option to purchase up to 450,000 additional preferred shares.

There's data to come from the Institute of Supply Management, which may report that manufacturing sentiment dropped further below the 50% level indicating economic expansion. Also out is data on construction spending for February.

U.S. automakers are due to report their monthly sales figures, with Edmunds.com seeing a 13% drop in March sales. Chrysler, held by Cerberus Capital Management and Daimler, is expected to post the worst figures of the Big Three.

Elsewhere, International Business Machines
IBM, -1.26%
said late Monday it learned it has been temporarily suspended from new business with federal agencies because of an ongoing procurement probe. The Environmental Protection Agency is probing possible procurement integrity violations by IBM employees.

Microsoft
MSFT, -1.70%
is not planning to increase its offer for Yahoo Inc.
YHOO
according to a report in The Wall Street Journal.

Dell
DELL
is closing a facility in Texas and reiterated it's going to cut at least 8,800 jobs.

PepsiCo
PEP, -0.60%
was downgraded by Goldman Sachs to neutral from buy, with the brokerage preferring Hansen Natural
HANS

International stock markets were mixed. Chinese stocks suffered, with the Shanghai Composite losing 4.1%. But buoyed by the UBS news, the Swiss SMI rose 2%.

U.S. stocks on Monday finished the worst quarter in nearly five years with a solid advance.

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